Will augmented reality be retail’s red pill?

Have we witnessed peak augmented reality or will small businesses incorporate it into their marketing mix?

Pokémon Go was the summer blockbuster that few people saw coming. The game made use of a very basic augmented reality (AR) mechanism that superimposed digital characters onto the real world, making us all go a bit Pokémad. Singletons used it to find dates. Grown adults found themselves going on elaborate detours to graveyards and braving the elements to score points. A man even quit his job so he could dedicate himself to the game full-time. Some small-scale restaurants and coffee shops have used in-game items on local Pokéstops to attract gaggles of hunters. The initial hysteria has died down a little but now that we’re feeling a bit more sensible it’s worth considering whether augmented reality can really help bricks and mortar retailers lure shoppers into offline shops. Or will it go the way of QR codes and Google Glass?

At its simplest, AR refers to the layering of information onto something in the physical world. It can project a digital image into a room to help you imagine what an armchair looks like in your living room or make a Squirtle appear in a dentist’s waiting room. This information could be accessed through a tablet, smartphone, specialist eyewear or a digital wall. It’s not a shiny new technology by any means: AR has actually been all dressed up with nowhere to go since the 1990s. But the hype is starting to build now, with Digi-Capital, the technology mergers and acquisitions advisers, projecting that the AR industry will be worth US$90bn by 2020.

A few factors have come together that are propelling the technology to the forefront, helping it to go mainstream. For one, it’s now on the radar of the average shopper, thanks to the ubiquitous Go. “Suddenly everyone from enormous corporations to small players and one-man-bands have woken up and gone ‘what’s AR?’,” says Georgina Wilczek, programme director for VR & AR World. “And they’d be stupid not to utilise it.” There are also a host of third-party apps making AR affordable by doing away with the cost of building a new app. “Price-wise, developing an AR campaign is comparable to creating a single-page website right now,” explains Kaan Aydogmus, creative director at Magnetic, a creative agency.

But perhaps the kicker is that a critical mass of people now have access to the hardware needed to enjoy AR: a smartphone. Most models come with the fast internet speeds, decent cameras and the GPS technology that’s needed for AR to be delivered. And unlike virtual reality, there’s no clunky headset required – although wearing one does enable a more immersive, hands-free experience.

The availability of the technology required to drive AR experiences means they have enormous potential for retailers. For example, high street stores can engage the shopper at different stages of their purchasing journey by enticing them to walk in and then nudging them towards buying something with a digitally imposed price offer. And since people actually have very little product information in a physical shop compared to what’s available to them online, AR can be used to enhance shopping experiences by giving people digital information they wouldn’t otherwise have access to, like extended product specifications and customer reviews.

AR also allows retailers to virtually offer shoppers more choice, Wilczek points out. It’s not beyond the realm of possibility that in the future shops will look more like digital showrooms that are powered by AR, with less stock being held in-store or perhaps even being 3D printed on demand. “There’s so much you can do, like giving customers a preview of a car that’s not even available yet, allowing them to open a car door and explore inside,” Wilczek says. “It’s definitely not a fad.”

But at the end of the day, AR is merely an enabling technology and small businesses must stop themselves from jumping on the bandwagon just for the sake of it, says Jonathan Chippindale, CEO of Holition, the creative tech agency. AR has to be useful if it’s going to stick. “If it’s not solving a problem, it becomes a gimmick that’s artificially inserted into a conversation,” he says. “And gimmicks don’t have longevity. Right now, 80% of AR is pure gimmick and does not belong in a retail space. I don’t understand how adding fairy dust around a perfume bottle makes me more likely to buy it.”

Yes, a small-scale retailer with a modest budget could make their in-store products AR-enabled. But should they? And who would care? The technology may be simpler than virtual reality but it is still introducing more steps into the customer journey. “Content is king,” says Aydogmus. “You have to give people value-added content or they’ll wonder why they bothered downloading the app if it’s just taking them to a website. But if you show them great content they’ll become brand ambassadors.”

“There’s also a danger that instead of enhancing the in-store experience be looking around, picking things up and engaging with their surroundings,” Chippendale says. “People talk about AR immersing people into a world but it’s not really immersive at all if you’re just looking at an itty bit of content on your phone.” Besides, when people are in a small-scale high-street shop, they may well want a short-term break from the digital realm and have a conversation with a real person.

Many brands, however, are embracing the creative possibilities. Aydogmus is helping clients like the Fly-Inn Beach Club in Turkey use AR to give diners insights into the provenance of their dinner. It’s not essential information but it does make the experience more enjoyable. And isn’t that enough? In an age when shopping online and getting your dinner delivered through an app is easier than ever, can AR help people fall in love with the offline shopping experience all over again by adding a sense of delight and surprise? Does it really need to be useful to have any value?

So far, though, it tends to be larger brands that have embraced the technology, while examples among the small business community are much rarer. Aydogmus thinks this is because there’s a misconception that AR is expensive. “When you first show people the technology, they think it’s magic and imagine it’s going to be pricey,” he says. “But that’s not necessarily true.”

More than that, though, it’s not yet mission critical in the way that having a mobile site is. “A lot of firms are interested in AR but not a lot of consumers are yet,” says Chippendale. “No consumer has ever turned away from a brand because they don’t do AR.”

Wilczek, though, is optimistic. “Given the rate at which the technology is developing and the interest is growing, the feeling from the experts is that this isn’t something that is going to go away,” she says. “It’s plausible that within five years we’ll all have eyewear in our top pockets that will enable us to have an augmented experience as standard.” Aydogmus’s prediction is that AR will become more accessible soon, potentially being integrated into a phone’s camera, which will negate the need for an app at all.

AR is undoubtedly useful for bringing a 3D product into a home, allowing shoppers to visualise how products would look like while shopping from the comfort of their sofa. Whether it can also draw people into physical shops and help them decide what to buy is another matter.

About the Author

As our web editor, Maria is on the lookout for stories and news about Britain’s most exciting startups and small businesses. Part Singaporean and part Scottish, Maria has a background in content marketing and editing.

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